×

China GDP: What the big banks are predicting

Karl Johaentges | LOOK-foto | Getty Images

Global markets will be on tenterhooks Monday awaiting the release of China's third quarter gross domestic product (GDP) report, which is expected to show a continued deceleration in the world's second largest economy.

While economists agree growth fell below 7 percent in the July-September period, down from 7 percent in both the first and second quarter, the magnitude of the slowdown remains a source of debate.

Nevertheless, a growth rate below 7 percent would mark the slowest pace of expansion since the first quarter of 2009 – during the depths of the global financial crisis – when the economy grew 6.2 percent.

China has shot up the list of investor concerns in recent months – a result of extreme volatility in the domestic stock market, the yuan's surprise devaluation and a disappointing run of economic data.

CNBC takes a look at how six major banks view the state of the mainland economy, and their growth projections for the third quarter.

Bank of America Merrill Lynch

Prediction: 6.7 percent

"We expect GDP could decline to 6.7% yoy in 3Q from 7.0% in 2Q, pointing to bigger downward pressures to the real economy amid the jittery markets," BoFA-ML said.

"By industry, the slower GDP growth was mainly due to falling growth of the financial sector after the stock market slump and slower industrial production (IP) growth, while real estate's value added may improve modestly. We think that private investment demand is quite weak and industrial destocking has continued on sluggish economic outlook and volatile financial markets."

Goldman Sachs

Prediction: 6.8 percent

"We expect Q3 GDP yoy growth to be at 6.8%, slightly below 7%, which can still be claimed to be in line with the "around 7%" GDP growth target," Goldman said.

ANZ

Prediction 6.4 percent

"China's activity data appeared to have remained sluggish in September. We expect Q3 GDP to slow to 6.4% in Q3, from 7.0% in H1," ANZ said.

Nomura

Prediction: 6.7 percent

"We maintain our GDP growth forecast of 6.7% for Q3 and 6.4% for Q4, which should slow further to 5.8% in 2016," Nomura said.

"Given the lackluster growth outlook, we continue to expect moderate fiscal stimulus from the central government and continued monetary easing, with one more reserve requirement ratio cut in Q4 and another four in 2016 (each by 50bp), together with two more benchmark interest rate cuts (each by 25bp) in 2016."

Barclays

Prediction: 6.5 percent

"Following the tepid NBS and Markit PMIs, the mixed trade data suggest the economy could bottom in Q3 due to soft external demand and sluggish domestic demand," Barclays said.

ING

Prediction: 6.5 percent

"Our below-consensus 6.5% GDP growth forecast is based on a significant hit to activity in July-August from the financial market turmoil. We're less dug in on the 3Q forecast than on 3Q growth being the low for the year. We forecast GDP growth bouncing 0.2 percentage points to 6.7% in 4," ING said.